Mandatory refund procedure under Rule 92(3) requires notice, reply time, hearing, and proper consideration before rejection.

Rule 92(3) of the CGST Rules makes it mandatory for the proper officer to issue notice, allow fifteen days to reply, consider the reply, and grant a hearing before rejecting a refund claim. A rejection passed after giving only seven days to respond, without properly considering the applicant's email reply and without hearing, breaches this statutory safeguard. The refund rejection was therefore unsustainable and was quashed, with the matter remitted for fresh consideration after a valid notice and hearing.

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Issues: Whether the rejection of the refund claim was vitiated for non-compliance with Rule 92(3) of the Central Goods and Services Tax Rules, 2017, including denial of the statutory reply period and opportunity of hearing.

Analysis: Rule 92(3) requires the proper officer, upon proposing rejection of refund, to issue notice, allow the applicant fifteen days to reply, consider the reply, and afford an opportunity of hearing before rejecting the claim. The show cause notice granted only seven days and the rejection order was passed without properly considering the petitioner's email reply and without granting a hearing. The statutory safeguard is mandatory and forms part of the refund adjudication process; its breach renders the rejection unsustainable.

Conclusion: The rejection order was quashed and set aside for violation of Rule 92(3), and the matter was directed to be reconsidered afresh after issuing a fresh notice and granting hearing in accordance with law.

Final Conclusion: The refund rejection could not stand because the prescribed refund procedure was not followed and the petitioner was denied the protection mandated by the rules.

Ratio Decidendi: A refund claim cannot be rejected unless the proper officer follows the mandatory procedure under Rule 92(3), allows the prescribed time to reply, considers the reply, and affords an opportunity of hearing.

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